After Hot Start to the Year, Is Enterprise Products Partners Stock Still a Buy?

Enterprise Products Partners (NYSE: EPD) stock is off to a hot start in 2026, with its share price already up more than 20% so far this year. Throw in its nearly 6% yield, and the stock is on track for a great 2026. Meanwhile, its momentum continued after the company posted solid first-quarter results.

Let's dive into its report to see if the stock is still a buy.

A great environment for Enterprise

Enterprise faced several headwinds in 2025, but those now look to be behind the company has it turned in strong growth in Q1. For the quarter, Enterprise's operating income climbed by 8% to $1.9 billion, while its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped by 10% to $2.7 billion. Its operational distributable cash flow (DCF), which is operating cash flow minus maintenance capital expenditures (capex), rose by 5% to $2.11 billion, while adjusted free cash flow came in at just $1.93 billion, an 83% increase.

Enterprise's distribution remains well covered, and its balance sheet continues to be in good shape. It had a 1.8x coverage ratio in Q4, based on its DCF, while it ended the quarter with leverage (net debt adjusted for equity credit in junior subordinated notes divided by adjusted EBITDA) of 3.2 times. It paid a $0.55 per unit quarterly distribution, which was up 2.8% year over year, and it bought back $116 million in stock in the quarter.

Looking ahead, Enterprise raised its growth capex budget for this year by $300 million, taking it to a range of $2.9 billion to $3.2 billion. That's still a big drop-off from the $4.4 billion it spent last year, and it still expects to produce around $1 billion in discretionary free cash flow in 2026 despite the increased capex. It also recently raised $600 million from an asset sale.

Image source: The Motley Fool.

Is the stock a buy?

2026 is off to a better start than expected for Enterprise, helped by increased energy price volatility. Even though about 80% of its business comes from fee-based activities, it generally does well when there is a lot of movement in energy spread differentials. Meanwhile, the additional build-out of two new natural gas processing plants in the Permian should bolster what was already expected to be a strong 2027.

As one of the best-run and steadiest master limited partnerships (MLPs) in the midstream space, this is a stock that income-oriented investors want to continue to own for the long haul and is always worth adding on any dip. However, I'm likely not chasing it here given its strong outperformance to start the year, as there are better values in the space.

Geoffrey Seiler has positions in Enterprise Products Partners. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.